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ARDEN HILLS CITY COUNCIL WORK SESSION-TCAAP MDA- May 24,2007 5 Mr. Inman indicated when you have a master developer coming in to do the project, they will want to know that they are at least going to walk away with a certain amount of profit just on the land sale. The construction is a separate activity. Ms. Kvilvang indicated it will be a while before they know the real gap and the real numbers. Mayor Harpstead indicated that the City may sign an agreement that says "based on what we know today, it looks like you need, $X million." Then once building ofB, C, D and E starts, the number could go down to O. He stated the City is not giving the developer the money; they are giving them the opportunity to get that money in the future. Councilmember Holmes stated it is possible that with A, they will have to pay them the money up front. Mayor Harpstead indicated Ehlers is showing them Stage I of a two stage process as to how much potential obligation the City has for assistance. Councilmember Holden expressed concern about whether they are expected to pay the gap money and she did not think the developer should be allowed to assume that the City would pay the difference. Mayor Harpstead indicated the developer and Ehlers want to look at the project in certain management chunks and in this case it was decided it would be land development and then it would be building development. It could even be phases of building development. Councilmember McClung indicated he did not want to go forward with this unless he can see Phase II and felt that Ehlers should be skilled at this and be able to do it. Ms. K vilvang stated at this time they would not know since not all partners were present. Councilmember McClung asked if Ehlers could ask the developer what they planned to build. Councilmember Holden asked wanted to know how the City can obtain as many grants as possible. Ms. K vilvang indicated they put it in the master development agreement that they have to exhaust every grant source that is out there and pursue all those. Most of the grants that are available for redevelopment the City needs to apply for. She stated some will go through the Metropolitan Council, but regardless it's in everybody's best interest to get more cash for the project. Councilmember Holmes asked how the City should go about putting pressure on the developer to get the grants? City Administrator Wolfe indicated she informed them that if they want any chance of consideration in the discussion of public financing they are going to need to demonstrate to the City an enormous amount of time, energy and money spent on identifying, applying and cooperating with the City on getting grants. She stated it is also one of the statements within the Public Finance Policy.